Bazaar Economy / Pathological Export Boom

According to the Bazaar hypothesis vertical integration in production is falling because a growing amount of value creation is being transferred to the final stages of production close to the customer, where production is less labour intensive and firms are better placed to withstand international low wage competition. The bazaar hypothesis does not claim that value creation in exports is slumping, but that growing quantities of materials are being channelled through companies relative to value creation, which is inflating export volumes. This hypothesis developed in the course of the lively debate surrounding the bestselling book Ist Deutschland noch zu retten? Hans-Werner Sinn first employed this term himself on 15 November 2003 in his speech (Deutschland-Rede) at the Schloss Neuhardenberg Foundation.

In Die Basar-Ökonomie Sinn developed the theory of the “pathological export boom”, whereby Germany is overspecialising and transferring too much value creation to exports at the expense of the domestic market; or boosting value creation in exports at an excessively speedy rate. Since the pathological export boom may have been triggered by static wages that do not react to international low wage competition, this overspecialization reduces prosperity

Event

News

“The Road to a European Transfer Union”

01/29/2018
Since the 2008 global financial crisis, European policymakers have consistently relied on Northern European countries to foot the bill for the rest of the eurozone. But what will happen in the coming decades when the coffers run dry?
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Hans-Werner Sinn supports the petition for Exit of Brexit: A "New Deal“ with Great Britain and a better future for the EU

12/07/2017
The undersigned are deeply concerned about the economic and political impact Brexit will have on Britain and the EU. We appeal to all responsible politicians, business people and citizens: Help us to avert Brexit.
Sign the petition

“Germany’s Götterdämmerung”

11/21/2017
Hans-Werner Sinn welcomes the prospect of a minority goverment, especially if genuine public debate returns to the Bundestag
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“Buffering Volatility: A Study on the Limits of Germany's Energy Revolution”

06/13/2017
Based on German hourly feed-in and consumption data for electric power, this paper studies the storage and buffering needs resulting from the volatility of wind and solar energy.
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“How Macron Can Unite Europe”

05/23/2017
Creating a fiscal union without a political union would forever block the road to European unification.
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